Insolvency
Inability to pay debts when due.
Real World
Wilko entered insolvency in August 2023 when it could no longer pay suppliers on time, despite having stock on shelves — showing a business can have assets yet still be unable to meet its debts.
Exam Focus
Don't confuse insolvency with bankruptcy; insolvency is the financial state, bankruptcy is the legal outcome — examiners penalise muddling these.
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